Taxes, Innovation, Digitalization and Growth

Knowledge and innovation are key prerequisites for international competitiveness and sustainable economic growth. The implementation of an innovative and investment-friendly environment, however, requires profound knowledge of its major drivers. In this regard, we particularly focus on the role of tax policy and its potential to provide incentivizes for investments and sustainable growth. Our research aims at explaining the link between the relevant taxation environment in a given country – e.g., specific tax incentives for R&D investments and taxation of SMEs – and a country’s innovative and economic performance.

Digitalization is a major challenge for the future of tax policy. For example, enforcement challenges arise because digital business models do not require a physical presence in countries where business is done and the nexus for taxing corporate profits might therefore have to be adjusted. Digitalization also offers new opportunities for an effective tax administration. MaTax research addresses the tax implications of digitalization, and thereby contributes to the design of a modern tax system.